Covid19 has rapidly and seriously changed the American economy and culture. How endurable are these changes? If these changes are endurable, there will be many Covid19 related post-lockdown opportunities for startups. If not, perhaps we will reset the world in a year or so and startup opportunities will be the exact same as they were in 2019.
My sense is that we’ll see the acceleration of existing trends and a few serious opportunities, but that this can be overstated. If you’re looking for new ideas, don’t update too much on Covid19.
The lockdown has shaped many spheres of our life:
- More games with friends and family over the internet.
- More group chats.
- We interact with and may trust strangers a lot less.
- Demand for better group events. What happened to concerts?
- We have more time and we can’t spend as much of it outside. More Netflix and video games.
- We have more time and don’t want to spend all of it on entertainment. Exercise apps like Strava, Nike Run and meditation apps like Calm and Stoa are in.
- There’s a lot of uncertainty and discomfort, I was told that psychics saw an exceptional boost when relief checks were delivered. I believe it.
- More remote work.
- Demand for tools and processes that support remote work.
- Medical supplies, food and beverages are in. Fashion and luxury goods are out.
- Subscription and convenience services are up.
- Supply chains
- We’ve learned that many of our supply chains were fragile. Keeping supply chains in America is likely more expensive for both suppliers and consumers, but we’d be more robust as a nation.
- We’ve increased the status for work on pandemic preparedness.
- State Augmentation
- Startups and big companies are supplying the state with more masks and tracking programs. The sort of thing that authoritarian governments would have the state do, America has private companies do.
In the short term, there are many useful things to build and contribute to.
In the longer term, I expect that many of these spheres will return to their prior shape. However, there’s promising work to be done and products to built.
- In person interaction is still much better than chatting over Hangouts. We largely want to date, dance, and talk in person. Things don’t have to be this way, but I haven’t seen solutions to this yet.
- Already dying industries like movie theaters have had their death accelerated.
- I expect that the small spike is just that and doesn’t indicate a trend. Remote wellness services are not that sticky. The dark secret behind many successful wellness services is that they’re making money off of people who are subscribed but don’t use their product. Nike Run cannot replace the social and motivational goods of CrossFit yet. There’s no evidence to believe that this will change.
- More and more tech companies and startups have already been experimenting with remote work. I expect that trend will continue, but I don’t know whether Covid19 will speed it up or slow it down. On one hand, companies are likely learning that they can continue to be just as productive while remote. On the other, this learning is correlated with unpleasant loneliness and isolation. This association is real and may not go away.
- I’d bet on subscription and convenience services. I’m long Amazon and the ecosystem it requires.
- Supply chains
- I wouldn’t be surprised to see more protectionism and a push for bringing supply chains back to America. But a major one? Unlikely.
- There’s a lot of exciting and important work to do here. More and more people will be thinking about pandemic preparedness which is great.
- State Augmentation
- The exact shape of this is unclear, but this area is really promising for companies.
I expect that we’ll see an unbundling of services that are stretched across these domains. Right now Zoom is used for work, socializing, and entertainment. Services that specialize in socializing and services that specialize with different kinds of work is promising. One way this can go is that existing services bring video conferencing into their software. There’s space for entirely new products here. Facebook Messenger Rooms is a stab at this.
My sense of how things may go post-lockdown is not set in stone. I expect that I got at least one of the above wrong, someone will make something I won’t expect.
If there’s a cultural change that I hope persists, it’s that America raise the status of building and surviving.